Mad Money w/ Jim Cramer 10/30/26

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1:17Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Other people are my friends. I'm just trying to save a little bit of money here. My job is not just to teach, but to put everything in context, which I know you do need. So call me at 1-800-743-CBC. Tweet me at Jim Kramer. There was so much tomah this week. And you might think Uncle Kline of the Nasdaq has to have run its course by now. You might think that the drama about the destruction of the data center has to have peaked by now, too. But for my money, next week, next week might be even worse. some crazy volatility, a lot of emotion.

1:55So after a harder day where the Dow fell 572 points, S &P declined 1.82%. Now it's that plummeted 2.86%. It's the closest worst month since March 2025. Well, we got to take a look at what awaits us and why I think the tech route, sadly, may not yet be over. So let's do this. Let's start with the biggest events, a little bit different from usual, and then we'll get granular with stocks. Tuesday, as we know, is Election Day. I hope you'll vote if you haven't voted already. And we need to see if the House and Senate will turn over to the Democrats. What's at stake? Well, for the stock market, I think chiefly the environment, specifically the expedited work on any source of energy that isn't natural.

2:36The Dems will be able to kill recently enacted anti-green regulations. Plus, I'm greatly concerned that we could see a slew of anti-data center politicians come in and stop projects that were in the numbers, so to speak. The neocloud companies have a lot to lose here because they have nothing to fall back on. I am not going to write off the data center entirely because there are still plenty of states that will still welcome them. However, given how long it takes to cite them, busted deals will indeed hurt the whole ecosystem. Wednesday, the president is supposed to decide about Iran. This decision could rock stocks.

3:11If the war is ratcheted back up, oil will go even higher and inflation will get more ingrained. Chevron's the best if you plan them, don't. Valero's number two. That brings us to our final big event, the non-farm labor report, which I think is going to show robust hiring, but for a little increase in wages. That's one of the reasons I think the bonds are so tame. The other being the debacle this week in earnings that's been limited mostly to tech companies, both large and small. So now let's go over to the stock portion. Remember, I told you a big picture. Now we're going to go granular of what's going to happen next week.

3:44Remembering that when earnings season is beginning to wind down, there are still plenty of landmines ahead, especially in the remaining tech names. But sure enough, when we come in on Monday, it would not surprise me if Marvell Technologies, MRVL, announces a deal to acquire Lumentum, which would be one of the largest tech deals ever. Marvell stock has been flying high ever since CEO Matt Murphy held a terrific candle this week on October 6th. coincidentally at the top of the NAS, where he revealed his plans to try to become one of the most dominant semiconductor companies ever. He wants to dominate the fiber portion of the data center.

4:17He knows that all the copper in data centers will eventually be replaced by fiber optics, which transport data faster and give off much less heat. The industrial logic of this combination, it's fabulous. I think the WAGs will say that this transaction reminds them of when JDS Uniface, JDSU, another fiber optics company bought SDL for$41 billion in mid-2000, even though it was only doing about$300 million in sales at the time. Right now, with the data center theory of investing under a salt, you have to recognize that only a few of the long knives are sheathed. Ultimately, I reject the analogy, though.

4:53These companies can sew up a great deal of intellectual property for the data centers for years to come. That's how much this transaction could mean to Marvell and Lumentum shareholders. There's actual users and people want to pay for their products. After the close Monday, Apple reports. Apple stock is one of just a handful of NASDAQ names that just hit their all-time highs in late October. That's because it's got some terrific new products, and it gets the benefits of Google's Gemini AI models for Siri. But with none of that ridiculously expensive data center build-out stuff, the iPhone Duo has launched, but good luck getting your hands on one.

5:26I can tell you that this one is revolutionary. It's a phone that unfolds into a real TV. Now, look, I'm a sports addict. I love watching when I'm working. And I'm going to get five of them once I'm able to and give them away for the holidays. I hope I can get a good deal from T-Mobile at Costco. Interesting that T-Mobile stock was up today. What was that all about? A prelude to something good? Am I concerned that Apple stock has risen so much? It sells at nearly 40 times earnings. So the highest that is, by the way, the highest price earnings mobile I can remember. But I've ridden through every vulnerable moment for Apple since it's been at five dollars.

5:59You can, look, you can trade it, all right? I'm not going to say that's wrong, but I'm an owner. Palantir also reports, and I expect nothing but good news, as every testimonial that I hear behind the scenes is effusive about how much value they create when you bring them in. Now, I have occasionally chided Alex Karp for being so fiery, but his skills and the skills of his team render my...

6:24...karping irrelevant. This market is full... Hey, I can still get around. This market has fallen in love with drug stocks. And the two that I think have a chance to follow in this week's giant footsteps of AstraZeneca and Merck will be Pfizer and Amgen, with the latter probably talking about its rival to Lily's weight loss drugs. They should talk more about Repatha. That's a real good thing. We also have advanced micro devices reporting AMD. And I'm going to talk about the heartbreak of its competitor, Intel, later in the show. AMD has PC exposure and has taken share from Intel consistently. But it has data center galore, including GPUs, direct rivals to NVIDIA.

6:56And I think that it will do much better than Intel, though it still might go down on PC demand destruction because of a high price of memory. Keep track of that. We're starting to get demand destruction for some things that have gone up too high. Wednesday is CVS Day. Now, CVS Health reports, and I'm fascinated by this company, given how it's kind of a last man standing operation, the pharmacy business. We had it in the bullpen for the travel trust. But I worry about this pharmacy benefit management business manager business, Caremark, which some critics say raises the price of drugs. I wish you could disengage from that business.

7:25If it could, I know the stock would go higher and I would like to be on board. I'm worried about the stock of McDonald's. I thought management offered a credible plan of story models and a renewed focus on value. But we have all read the negative comments of its key constituents who are the franchisees. I wonder if we are only hearing one side of the story and the program is doing well. Heaven knows McDonald's needs it. Thursday, Kimberly Clark reports. And it's been a big beneficiary of this headlong move into consumer packaged goods or CPG stocks. I am thrilled about that. Why? Because I've got a big position for my travel trust.

7:56And I've talked and written endlessly to club members about its merger with Kenview. That's the old Johnson & Johnson consumer health business. If this one falls before then, I think you should just pick some up. Finally, Friday is a CBC Investing Club member. So we're going to convene for our annual meeting where we will discuss our portfolio, talk about the pitfalls of the market. And, of course, the biggest winners. Jeff Marks and I always have such a grand time talking to members. For those who are coming, I will salute you. For those who are not members, I'm cooking up some real new educational moments for 2027 that I want you involved in.

8:29The bottom line, after a brutal week for tech, don't assume that the worst is necessarily behind us. We've got the election, uncertainty overseas, the jobs report, and another slew of earnings. That means we might not be out of the woods yet. Wall Street's no longer giving expensive tech stocks the benefit of the doubt, especially when it comes to all that data center spending. My advice, don't try to call the bottom in the NASDAQ just yet. But maybe pick up some high-quality companies that are being thrown away. And don't forget that even great earnings, if they're from tech, might not be enough to send a stock higher anymore.

9:05That might only be true if we go from a lower level. Let's go to Jim in New York. Jim. hello jim how are you i am doing well jim tell me how you're doing i i'm doing wonderful and it's an honor to speak to the great one i wish i were great feet of clay today but what's going on ibm it's one of my uh hero stocks buy sell hold no i mean it's funny that you mentioned ibm is one of the stocks that reported while i was away for some stuff involving my family. And I didn't get to talk to Arvind Christian and tell him, thank you for doing what was right, pre-announcing when things weren't good, and what was then an immediate recovery.

9:52He is a good man, and that's a good company. And I'm proud to know him. Let's go to Jim in Florida. Jim. Hey, Jim. Down here in Naples, Florida. How are you doing? I am doing well. How about you? Great, buddy. Hey, listen, what the heck's going on here with Corning? And they've got all these contracts with the phone companies, T-Mobile and Verizon and those guys. You're right. We sold it for the trust, but sometimes it's better to be lucky than to be good because I think Wendell is doing a good job. Here's the skinny, okay? They have a lot of business with Verizon and with ATT in just regular long-distance haul.

10:29And people feel that that is going to be eliminated or crushed by Starlink. Even though we know it's a small part of the business, you know how this market is right now. That one little chink is enough to send a stock down. I like corning here. If we didn't have so much tech, I would go right back in it now that it's going lower. All right, look, it's been a brutal week for tech, but don't necessarily assume the worst is behind us. We've got a couple of really volatile days coming up. On Man Money tonight, the earnings out of big tech are saying that AI CapEx spending is slowing. So how worried should you be about the whole complex?

11:00Take a close look at the guidance. Get used to this. This is what we're going to be focused on for some time. And in a sea of red, I'm taking a look at one sector that actually made an all-time high today. Don't miss my deep dive on the consumer staple stocks. And days like today are reminders that you can't have too much of your portfolio intact. And that's why we're playing another round of MI Diversify and doing a checkup on your holdings. So stay with Kramer. Don't miss a second of Mad Money. Follow at Jim Kramer on X. Have a question? Tweet Kramer. hashtag mad mentions. Send Jim an email to madmoneyatcnbc.com or give us a call at 1-800-743-CNBC.

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13:26The AI infrastructure stocks are decidedly out of favor after a very tough October. And at this point, the big question investors should be asking is whether this is just a temporary setback on the road to higher levels, a storm that will pass, or if this is the beginning of the end for this theme, the denouement, after we've seen such huge gains over the past four years or so. One way we can begin to answer this question is to look at what some of the largest tech companies are saying in their conference calls, chiefly, about their capital expenditures. or CapEx plan so far this earnings season.

13:59See, just a small handful of companies are responsible for the lion's share of the hundreds of billions of dollars that are being invested in new data centers. Really, it's just five that matter. Alphabet, Amazon, Microsoft, Meta, and SpaceX. These companies' CapEx spending becomes the revenue for all the various companies that sell into the data center. And you know, we talk about these all the time. So at the end of a bruising week for tech, where so much money was lost versus at least other sectors. I want to spend some time focusing specifically on what these companies said about their CapEx budgets.

14:35I want to be factual, not emotional. Let's start with Microsoft, because CEO Satya Nadella and CFO Amy Hood, after these reports, they'll get the grown-ups in the room spending money only when they have a clear idea of how they'll earn it back and then some, mostly through Azure, which is, we know, their web service business, and some to the extremely successful co-pilot. Microsoft had the best report of the three mega-cap tech companies that reported this week, beating revenue and earnings expectations, while Google and Amazon missed on both. Azure grew 48%, and the quarterly free cash flow was positive of$18.6 billion.

15:10That's the appeal of living within your means, investing somewhat aggressively while still managing to generate cash after your capital spending. Microsoft was the only company that signaled a cut to its spending. Its CapEx result for the reported quarter came in well below expectations, and the company lowered its calendar 2026 CapEx forecast to$170 billion, down from$175 billion previously, largely because of delays in third-party capacity. That means some computing capacity expected from these neoclouds, you know, companies like N-Scale, iREN, Nebius, isn't arriving as planned. Microsoft expects spending to accelerate the second half of fiscal 2027, meaning the first half of calendar 2027.

15:51So this might be more of a delay rather than outright cut. Still, it was noteworthy that with its restrained comments on CapEx, Microsoft had one of the best reactions of any mega cap tech stock. We really like the stock for the trust. And we gave CNBC Investing Club members, I thought, a fabulous bulletin about it, much better than all the street research that I read. Alphabet, tougher spot. The company missed both earnings and revenue expectations for the first time since late 2022. Search, which accounts for about half its total revenues, missed expectations. And its growth slowed to 12 % from 17%.

16:25That's a big number. Okay, that's just from the previous quarter. That brings back concerns from years ago about AI eating into its core advertising business. I thought those concerns were going away. That's not true. I worry that there is no solution for this problem. But maybe worse, they didn't even seem to notice it themselves. That is... bearish. Google Cloud was the only standout and the only real bright spot for the quarter. Cloud maestro Thomas Curran outdid himself. But to keep up that growth in cloud, the company's going to have to keep spending. That's why Alphabet reiterated the guidance for$195 billion to$205 billion in CapEx this year and said it expects a significant increase in 2027.

17:06Unlike Microsoft, its free cash flow was negative$9.1 billion, and Google's shares were indeed punished for it. They had their worst single-day performance in history yesterday, falling 12.6%, losing nearly$500 billion in market value. All I can say to them is, thank heavens for Intel. They made you look good, Alphabet. Alphabet's also renting more compute capacity. CFO Inad Ashkenazi said Google started using third-party compute late in the third quarter and will increase users in the fourth quarter. She warned that level pressure margins is really expensive to rent that in the near term, but management thinks this is a better solution than turning away customers.

17:42We already know that back in June, Google agreed to pay SpaceX$920 million a month for access to NVIDIA-powered computing capacity. Can you imagine? Can you really make that money back? Then there's Amazon, which posted its first double miss at sales and earnings in four years. It reiterated its formal outlook of$220 billion in CapEx for 2026. And Andy Jassy expects to spend, I'm going to quote, meaningfully more, end quote, in 2027, saying customers begin consuming new capacity almost as quickly as Amazon installs it. Impressing upon us that, in other words, there's a good return on this stuff.

18:17The AWS cloud business grew 39 percent. Management expects growth above 40 percent, both in 2027 and 2028. Now, that's a powerful argument for investing in more compute. But Amazon's free cash flow was negative$33.5 billion in the quarter. That's the third straight quarter in which cash flow was negative. The customers are there, but so are the bills. The stock was hit hard after hours last night, but ended down less than 2 % today, much less than the Nasdaq as a whole. More on Amazon later in the show, but I can tell you that I think the market got it wrong by selling the stock. Meta reported last week, and the results actually, in retrospect, were strong on top and bottom lines.

18:50Third quarter revenue was a clear beat in a record quarterly figure, but quarterly free cash flow was, again, negative$2.1 billion. It's planned for$97.5 billion in equity financing, including a proposed$60 billion at-the-market offering starting next year, didn't help the stock. Now, I'm going to Mark Zuckerberg. These kinds of at-the-money offerings drag your stock down. Just try to get it done as fast as possible. And by the way, the people you're speaking to from Wall Street know less than I do, so I know wherever I speak. But then again, maybe they have admittedly, let's say, less hubris than I have.

19:25How about that? But as for the company's 2026 CapEx forecast, it was narrowed to a range of$135 billion to$145 billion, slightly from the prior outlook of$130 billion to$145 billion. Now, here's the one that most intrigues me, SpaceX. Its results were strong, too. Adjusted earnings per share of$0.45, which beat estimates by$0.32. Its first profit of$4.4 billion was a huge step forward on the road to joining the S &P 500. All three segments, space, connectivity, and superintelligence, were profitable on an adjusted EBITDA basis. Because SpaceX's SI segment generated more than half of the company's revenue, up from just 17 % in 2025.

20:01That's mostly cloud infrastructure with some grok and cursor revenue. Hey, I did a lot of grok this last few days. I kind of like it now. I didn't used to like it. It had a bit of X ad sales, a bit. But SpaceX spent$19.6 billion on CapEx in the quarter and said it expects$35 billion to$40 billion in the fourth quarter. Nearly double Wall Street's estimate of around$20 billion as additional capacity comes online. The company also announced a binding commitment for approximately$40 billion of GPU equipment financing with an Apollo, that's a private equity firm, managed entity. So long story short, most of these companies are maintaining or raising their CapEx outlooks.

20:37And the few that are giving color on 2027 said they expect to spend even more next year. That's positive if you're bullish on stocks that sell into the data center. Not so positive, say, if you're Kevin Warsh, who runs the, well, let's just say the Federal Reserve done money here then. But there's one big thing to note as we exit these companies' reports. Microsoft was the only hyperscaler that said it would be spending less previously than thought. And it's not going to be the best reaction of any of these companies. Boards and management teams watch what their stocks do very closely. They always tell you they don't, but that's because they have a problem with disassembling.

21:10For now, we don't see any signs that they're getting cold feet on their spending plans. But what we've seen these past couple weeks continue, specifically the market rewarding smaller budgets and punishing bigger ones, then shareholder pressure could eventually force the hyperscalers to slow construction and cut their spending plans. That would be very negative for a lot of stocks, impacting all sorts of companies that have thrived these past few years. That's what we're watching after Daily Today in particular. The bottom line, we're not there yet when it comes to spending on AI, cutting, being cut.

21:42The checks are still getting bigger. But watch what gets rewarded going forward. A market that once demanded more spending is starting to reward restraint. If that changes the hyperscaler's behavior, today's punishment for the data center spenders could become tomorrow's problems for the companies that have benefited the most for all this data center spending. And they may need to be sold because I've got to tell you, I think there may never, ever be a boom this big again. Mad Money is back after the break. Coming up, with tech stocks turning turbulent, Kramer's choosing his favorite consumer staple stocks to help you diversify.

22:18Next.

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24:01This final week of October confirmed that we're officially got a problem with tech, as the NASDAQ 100 finished the month down more than 9 % from its October 6th all-time high. And many individual tech stocks are down much more than that after a brutal few weeks from the sector, especially today. Now, that will be in front of mind as we turn to November because tech stocks have powered this overall market's growth, not just for this year, but, you know, actually for the past three years. You'd say it's just been going on and on and on. With an outsized weighting in the benchmark averages like the S &P 500, part because they just kept going up and up and up, a recovery for tech is vital for the overall market's health going forward.

24:39Tech stocks concentrate the mind, not so the rest of the market. But for now, I feel compelled to remind you that the stock market is not all tech stocks. That's why we play a MyDiverse fight. And some other sectors have actually done quite well this month. It's just we don't talk about them enough. When you look at the performance of the 11 major sectors in October, you see that energy sector had the best month, up nearly 14 percent. Stick with Chevron. Makes sense if you believe as many do that the turmoil in the Middle East is about to pick up again after the midterm elections next week. But just behind energy is the group that I want to talk about tonight.

25:10It's a group that if there is a pickup in the war, it actually will not hurt. And I'm talking about the consumer staples, which are up nearly 11 percent in October. The staples are your classic safety stocks, popular when investors are fearful about riskier groups like tech. They've been out of favor for a while, though, primarily because so many of the staple sectors, subsectors have what seem to be secular, meaning longer term and not just like cyclical, but secular problems. existential threats like the drug stocks for junk food, okay? Right now, at this uncertain moment, I don't hate the idea of camping out in some staples, so long as you pick the right ones.

25:49That's why tonight I wanted to go through some of the favorite names in the group. I want to start with the one that I think is right now most captivating, and that's Kimberly Clark. We all know these companies. It's the newest staples holding for my travel trust, which you can follow by joining, and I urge you to do so, the CMC Investing Club. For now, Kimberly is a leading maker of all sorts of paper-based products like Kleenex tissues, Cottonelle toilet paper, Huggies diapers, and Kotex Feminine Care products. But soon, it will be even more of a powerhouse once the company completes its transformational merger with Kenview.

26:24That's the former consumer health business of Johnson & Johnson, which owns a bunch of iconic brands that you might have definitely in your medicine chest. You'll know all these. I'm talking about Tylenol, Listerine, Neutrogena, Band-Aid. Combined, the two companies should have 10 different brands with over$1 billion in annual sales. Once the merger is completed, there will be all sorts of efficient gains, and the combined company will have a scale that really few companies can match to the consumer product space. I think Kimberly Clark got a great value in its cash-in-stock deal for Kenview, which was announced after Kenview had a particularly tough stretch in late 2025.

26:59thought. For now, Kimberly Clark is just, let's just call it a cheap stock. It's traded less than 15 times earnings, excellent 4.7 % yield. We just started buying this one for the trust in September. We already have a nice gain. I'm thrilled about that. But I do think that the move is just getting started. What else? Okay. Before Kimberly Clark, my travel trust owned Procter & Gamble for many years. I still like it. But the company struggled during the period of elevated inflation that began roughly five years ago. And eventually we moved on, selling most of our position for a nice gain in 2024.

27:33And then fully exiting the stock earlier this year. Although I wish I held on to it, I wanted to move to Kimberly. I wanted diversification. Procter still has an iconic portfolio of brands. And you know them, Tide, Pampers, Head & Shoulders, Old Spice, Gillette, and Crest. And it's a quality operator with a new CEO, Shalesh Jajurakar, who seems like he's got some real game. Last week, P &G had one of its best quarters in ages. Top and bottom line beat in 4 % organic growth. Wall Street was only looking for 2.5%. It was a surprisingly good quarter. A very good conference call, by the way. With that result and the overall thirst for Staples names, investors piled back into P &G shares, and they were up over 11%.

28:11We're happy in Kimberly-Clarke for the trust. It has a much lower PE multiple and a much higher yield than Procter. But this is still a fine option for anyone who wants to get some new exposure to Staples. I think the stock can go much higher. I've been telling people you can buy it right here still. Now, here's a little trickier one, because with GOP-1, you may think, wait a second, why is he doing this? But it's Constellation Brands. I did a segment on this beer, wine, and spirits company earlier this month, explaining that Constellation had given its best quarterly update in quite some time.

28:39The core beer business is looking solid and taking share with brands like Modelo, still the top-selling beer in America by dollar sales, faster-growing brands like Pacifico, you know them as the brown longness with the yellow label, Victoria, which is a brand that didn't even try to market here, now they're finally doing it. But the big surprise was the wine and spirits business, which might finally be in a good place if years of portfolio changes. It's still very small compared to the beer segment, but it saw 15 percent shipment growth last quarter. Thanks to the success of brands like MeCompo, that's an inexpensive tequila, Kim Crawford Wine.

29:09I also like Constellation's acquisition of Spiked Aid. This is a Spiked Sports Drink company that is the talk of the liquor biz. I think this could be used, and I think it's one of the reasons why the stock has taken off. We're at the beginning of the arc here. Constellation shares have been screaming higher since I covered the story and ended October up nearly 20 percent. It increasingly looks like the worst is behind Constellation brands and the stock still cheap at 11 times earnings, 3 percent plus yield. Looks like new CEO Nick Fink has hit this ground running. One more quick one. The soda stocks have all bubbled up in October.

29:42Coca-Cola shares have gained 9 percent. PepsiCo was up 8 percent. And it seems like it might have bottomed last month. Even the long-forgotten Keurig Dr. Pepper made a great move, up 18%. Our favorite from this group going forward, and it's still not too late, but it's had a big move, is Coca-Cola. It had a great beat and raise third-quarter report on Tuesday morning, driven by strong volumes, not price hikes. That's important. They don't have the snacks baggage that PepsiCo does, and they continue to impress us on the innovation front, with plenty of diet or zero-calorie offerings for the GLP-1 crowd, as well as protein-heavy options like Fairlife Milk, which is crushing it.

30:19I mean, just killing banana flavor coming out real soon. Don't worry about it. Here's the bottom line. You've got to take what the market is giving you. And until we sort out some of the issues for the tech sector, some of the groups might be better bets for the time being. I like the idea of camping out in the Staples for a bit. Kimberly Clark, that's an investment, not a trade. Procter & Gamble, Constellation Brands looking better and Coca-Cola for the long term. Please do not forget that the Kenview closing kicker for Kimberly could close sooner than most people think. Hey, I want to go to Anne in Indiana.

30:52Anne. Hey, Jim. So sad about Cliff, but it was such a beautiful column that you shared with us. Thank you. Thank you. Yeah, this is, you know, I come out of here and I try to be like myself. I'm not an actor, obviously. I'm trying to do my best. How about that? I'm trying to do my best, Anne. Thank you. Thank you for this time. Thank you. I'm trying. I'm sure trying. I'm a club member. Thank you. And feeling so ambivalent about Costco, which I'm so sick of. But on a day like today, you know, I feel more grateful that I kept it. You know, look, this is one. I'm really glad you bring it up. I'll tell you why.

31:32Because I have been of the opinion and I had to speak to the company that maybe it's it's run out that that it's done. Do you know that every time I have felt that it is time to buy? I do not like the price of earnings multiple, which is 44, but I do like the changes that they're making. And I like the fact that both Costco and Walmart stock are acting well. That means they are fighting inflation. That's what the people want. Congratulations, by the way, to Walmart, too. They are fighting inflation. These two companies need to be applauded. And I think Costco were in a good place. Every time I said that I got really angry about it, that's when you had to bet with it, not against it.

32:09As tech waivers, I like to do a camping out in Staples for a bit. You know, it's kind of wilderness, you know, that kind of thing. There's much more mad money ahead, including Cray America's favorite game, Am I Diverse Effect? Ben, I've been too optimistic about a certain stock for a while, and after its latest numbers, it's clear that I need to do a mea culpa. I need to say I'm wrong, okay, because when I say I'm right, well, let's just say you can't do that and also not mention when you're really screwed up. on. So I got to go there. You probably want to stick around. And all your calls rapid fire tonight's edition of the Lightning Round.

32:42This is David Kramer.

32:51Jeez, we rounded out the month of October with red across the board. Other than those consumer packaged goods stocks, Nasdaq tumbling nearly 3 percent. Like I said earlier, this might not be the end of the tech sell off. So it's all the more critical for you to have positions outside of the tech sector. And that's why tonight we're playing Am I Diversified? You can make sure you're prepared for any turn in the market. That's why some people did so well today, because they own these stocks like health care, nothing to do with tech. I'm going to tell you whether you're diversified enough. Maybe you need to mix up a little bit.

33:20Now, why don't we start with Betsy in California? Betsy, what do you got for me? Well, Jim, in Am I Diversified, I have Abercrombie & Fitch. I have Eli Lilly. I have Lockheed Martin. I have Visa. And then for the ultimate diversification, I have Procter & Gamble. All right. Let me go to work on this. But you know what? This is the kind of, you know, now Betsy in California is not going home tonight thinking, why did I ever get in the stock market? She is not thinking, I cannot believe that I lost so much money in XYZ. That's square. You've got to be careful, which is now block. What she's thinking is I'm getting a good dividend in Procter, which is a consumer packaged goods company.

34:05I had tremendous earnings yesterday in Lilly, and the stock responded and went up big. I'm still going to take a flyer with a company that's on the mend, Amber Company and Fish, for apparel. Visa, that's consistency. Only beat this time by MasterCard was a little better. But you know what? Visa is up for the year nicely. And then Lockheed Martin, you got Jim Takelett, James Takelett, they call him. His name is Jim. And he is delivering, delivering, delivering. He doesn't like it when I say buy RTX instead because RTX is doing a little bit better. But we've got a defense company. We've got a credit card, but not credit, meaning borrowing money, the actual technology of a card.

34:42We've got a great consumer package company with a very good new CEO, by the way, a terrific drug company, and then a nice apparel company. And that is what that's a portfolio that I applaud. And that's a person who went home today and said, hey, what's everyone so glum about? All right. Next, we have Travis in Georgia. Travis. Hey, Jim, how are you doing today on this Correction Friday? Well, yeah, it's correction. I like that theory. I might not be over. Let's let's go to work. All right. By weight, I've got stocks HD, Home Depot, KMB, Kimberly-Clark, Google, GOOG, QNT, and KO. Am I diversified?

35:28You've got us kind of a home group. See, now Travis from Georgia, he's buying some Coca-Cola and Home Depot, both located there. I like that. Okay, so Continuum is his spec, all right? And that's okay. We don't mind having one spec. I don't happen to think it's doing very well, but it's a spec. It might be able to do well in any sort of quantum computer run, so to speak. Home Depot is something I own for the Travel Trust. Why? Because I find it's the most lending sensitive. Juno rates are down today, and that is making it so that mortgage rates may be going down, which means you might want to own some Home Depot.

35:59Kimberly Clark yields 4.7. It's merging with Kenview. That should happen imminently. And it's got very consistent earnings. Coca-Cola was the best consumer packaged goods product company in the market. I had, fortunately, I had dinner with the old CEO and new CEO recently. And I can tell you, I think it is in the best shape that I have ever seen Coca-Cola. So, and then Alphabet, okay, that's a loan. Well, look, I don't want to, that's a stock that we're fighting for right now. And you can own it. We decided for the club that we're going to just own it and see where it bottoms in terms of a price earnings multiple.

36:34We understand it is deeply hobbled. technology, spec. Remember, I'm not saying tech. It's tech and spec. Nice consumer products company. The best home retailer and, yes, the best of any of the food and beverage stocks. Now we're going to go to Nico in Illinois. We had a lot of good Illinois callers this week. Nico. Jimmy Chill in our investing club. As we know, how are we doing today, Jimmy? We are doing well. Well, you know what? Doing fair to Midland, as my father used to say. No matter what. Come on, how are you doing fair to Midland? It's like never just fair, and it was never just Midland.

37:14It was always fair to Midland. So let's go to work. All right. As we know, software and technology is becoming more part of our everyday lives, and also that we're looking to buy weakness and health care. For this basket, I'm loading up on tech, and I want to know what we should change and can add from here. Fair enough. My basket has ServiceNow, Microsoft, Salesforce, Intel, and Apple 11. Happy weekend. Happy weekend. Happy money. And Jim, am I diversified? Thank you. All right. Now, again, he did say this was his tech basket, which makes it more difficult because he's got a lot of other baskets.

37:52So I'm not going to say just wait a second. These are all tech. Intel, I was so disappointed in, and I'm disappointed in myself because I should have known better. The CEO and the CFO are not in my league when it comes to stocks. They're in the league when it comes to semis. And I should have realized from the way the stock acted and from the way that they handled themselves that something was wrong. I made a mistake. That's OK. I did it wrong, but that's nothing to do with Nico's portfolio. But I'm just saying I can't add insult to injury intel. Microsoft had one of the best quarters. They've seemed that they've gotten religion when it comes to data spend.

38:25Salesforce, Mark Benioff gave you an amazing quarter, and that's really good. App Lovin's way too speculative for me. That ship has sailed. And ServiceNow, frankly, I have to tell you, something went wrong here in ServiceNow. The quarter itself was a two-cent miss. It wasn't nearly as bad as people think. Somebody is blowing out of that stock. I don't know. And again, Liputin did a good job in saving Intel. My mistake was in believing that the future was now as opposed to the future being in 2829. So there we are. Applovin is problematic, and it's too low to sell Intel. ServiceNow, I've got to do more work in.

38:59But this is a basket of tech, and I don't approve of a basket of tech unless you have lots of other baskets. Anyway, thank you to all our callers. Mad Money is back here for the break. Coming up, he's the fastest mind on Wall Street, so we're putting him to the test with your help. Bring on the lightning round. Next.

39:26It is time. It's time for the lightning round.

39:36And then the lightning round is over. Are you ready? Let's start with Larry in New Jersey. Larry. Hey, Jim. Big BBIT. First off, I want to give my good all to see a lot to your nephew, Mr. Mason. Thank you. Thank you very much. Thank you. I appreciate that. I'm going to see my sister more. How can I help? No, you might as well. All right. It's a company I'm interested in. It provides internet cloud encryption to provide software development to IT and manages secure development software. Basically, central nervous system to secure a warehouse. 29 % year-over-year growth in earnings. A little over$12.1 billion market cap.

40:15Down about 4.5 % today, but year-over-year. Year-to-date up 47%. The company I'm interested in is JFrog, F-R-O-J. JFrog is a very good company, but it's a high-priced earnings multiple stock right now, even though interest rates were down this week, I worry. And I think that that one's more of one I would want to take profits in than I would want to buy. And it is a good company. I'm not saying that. It's just the stock might be too high for this market. Let's go to David in Texas. David. Hi, Jim. This is David Devon calling from Sugar Land, Texas. I'm calling to ask your thoughts on an American aerospace company that is bringing transformational transportation and technology to Texas and the world named Archer Aviation.

41:00Okay, Archer is a pure spec. It's a pure spec. So if someone, and you know, look, unlike every other manager in the world in how to make money in any market, I say you can own a spec. Why not? Maybe this is the one that's going to be the greatest. I don't believe in it, but that doesn't mean that you shouldn't believe in it. And I have to tell you that right now, right here at$4, it's not a bad buy. Let's go to Lewis in New York. Lewis. Hey, Jim, how are you? Thanks for having me on the show tonight. Ah, thank you. Thank you for being on. What's going on? Good night. Hey, I want to hear your opinion on a stock.

41:31It fell 25 % last week. The CFO announced a departure, and then management comes out and revises earnings in Q1, top end of the range. The stock is forging power solutions. Curious what you think here. I saw that. I think it's a really, really good company, and it's come down a great deal. I did some work on this. We were saying, geez, made that an interesting idea for the travel trust, 17 times earnings. I think you've got a good one. I'm going to bless it. Let's go to David in Florida. David. Hey there, Mr. Kramer. How are you doing? Hey, Dave. I'm doing well, David. How are you? Doing good.

42:05Aside from today, where do you see Oracle going and why has it been down through the whole part of this year? Look, it's down. Even though the price range multiple is low at 16, it has a huge amount of debt. And we have become increasingly more and more negative about companies with debt. They issued a very good report this week that made me feel more confident. Huh, Jimmy? That I feel very good about it. But I feel very good about it as a company, not as a stock. Sometimes they're two different things. Let's go to Jeff in Massachusetts. Jeff. How you doing, Jim? TGI up to you. Yeah, right back at you.

42:46So real quick, tractor supply, buy, sell, or hold. All right, this stock has come down to a 17-mold. Well, how long has not lost his mind? I think that it may be time. It seems like it's basing to me. I know those are dangerous words, but I think it's basing, and it's still a very good concept. And that, ladies and gentlemen, is the conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab. Coming up, Kramer has got a mea culpa to admit to. Regarding Intel, he's revealing how he views the company going forward. Next. Hey, Jim, your mission has been very successful in our family.

43:28I listen to your show multiple times a week for investing knowledge. I just want to say thanks. I love your show. Thanks for always looking out for the world back. A huge thank you for all you've done to make me a better investor. I got to call Kramer because I can't make a move without this guy. I want to make people better investors. if they make money, fantastic. Let's go to work.

43:57I got mad at myself this morning on Squawk on the Street, mad for anointing Intel as the key stock for the Chapel Trust before it fell off a cliff. Even though I held off buying more of it and urged people to see the quarter first before they bought anymore, I own a slug of it, and for that I deserve a program. At the same time, I also own Amazon, and there I think my perseverance is worth explaining. After years of loving Intel as a hedge fund manager, I lost interest in the stock once the great ones, Gordon Moore, Andy Grove, Greg Barrett, moved on. It became just another company. MD's Lisa soon knew that, and after years of playing second fiddle, she became first violin in the semi-orchestra, taking clients left and right with better products.

44:35It got run into the ground by the last CEO, and it had to be saved by the federal government with a cash confusion last year. The company had a savior, a brilliant old hand and former board member, Liv Blu-Tan, who is universally recognized as one of the smartest business people in the industry. I loved the hire, but I held up buying it for the trust until I started to hear Intel would be ready to ship a gigantic amount of data center CPUs, especially when they started to ramp up things like robots that are big consumers of them. I was too focused on the future data center opportunity, though, and I took my eye off the PC market, which still matters a great deal, and got walled for doing so.

45:09Did management bag me? No, I bagged myself because I believe the hype and I didn't focus on the downside. Now, the problem is that Intel isn't just a broken stock, something I would buy. It's a broken company because the company guided for a very weak 2027. Now, what am I supposed to do? It's one of the few stocks that has no hope on the horizon. I was irked by the press release. No, I was actually furious about it because what they did was accentuated the past, made it sound so good. Quote, we delivered another solid quarter. Season CFO David Zinger said, revenue gross margin and earning per share exceeded guidance, including our strongest data center revenue growth in 15 years.

45:43End quote. All true. That's why we bought it. But if we had only had some caution given about PCs before, it could have prevented the debacle. Even a hint could have helped. Oh, and again, my fault. It's always the money manager's fault. You just don't talk about it on TV. I believe and close my eyes to the possibility this PC business could be horrible. I got it wrong. I surrender. One where I refuse to surrender, though, however, is Amazon. Yes, it's sales and earnings missed, but I think that the right metric here is actually operating income, which at$28.1 billion was much better than the$22.5 to$26.5 billion that the company guided for and the$26.2 billion that Wall Street expected.

46:22Why not net income or earnings per share, right? Hold it, because those include gains and losses from the company's investments, which are unrelated to how the real business performed. Amazon's revenue also came in at the high end of its guidance range for what it's worth. Its Amazon Web Services numbers, the best part of the business, were extraordinary. But more important, CEO Andy Jassy broke with tradition and gave the best intermediate term forecast I have seen thus far from him. Quote, we believe AWS can grow north of 40 % in each of 2027 and 2028. Stunning. Jassy ended his remarks with this gem.

46:56What we're building at Amazon is unlike anything that's ever been built, but it's been seen before. There has never been a business with$1 trillion of annual revenue. Amazon is on a path to have two of them in AWS and stores. Those are words not of defeat. Those are the words of growth. Those could be the words of victory. Yes, right now Amazon is borrowing money to grow in the data center, and I think it's doing it a little too aggressively. I prefer the more measured pace of Microsoft. Still, while I can't stand by Intel, at least not until it's lower, maybe much lower, I think that Amazon should be bought right here because before people realize that it remains one of the best companies in the entire world.

47:37I like to say there's always a bull market. I promise not to find it just for you. Right here on Mad Money, I'm Jim Cramer. I'll see you Monday.

47:46All opinions expressed by Jim Cramer on this podcast are solely Cramer's opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by Cramer on television, radio, internet, or another medium. You should not treat any opinion expressed by Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such.

48:13To view the full Mad Money Disclaimer, please visit CNBC.com forward slash Mad Money Disclaimer. The quarter pound of a cheese is made with 100 % fresh beef cooked when you order it. Then comes the melted cheese, the slivered onions, the pickles, the ketchup, and the mustard Add hot crispy fries and an ice cold Coke, all for$8 And if things go well, one loose fry at the bottom of the bag The quarter pounder with cheese meal, now$8 Ba-da-ba-ba-ba